We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Prosperity Bancshares in Focus
Based in Houston, Prosperity Bancshares (PB - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 7.12%. The financial holding company is paying out a dividend of $0.56 per share at the moment, with a dividend yield of 3.09% compared to the Banks - Southwest industry's yield of 0.73% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $2.24 is up 1.4% from last year. Over the last 5 years, Prosperity Bancshares has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.83%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Prosperity Bancshares's current payout ratio is 47%. This means it paid out 47% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, PB expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $5.05 per share, which represents a year-over-year growth rate of 1.61%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, PB is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are You Looking for a High-Growth Dividend Stock?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Prosperity Bancshares in Focus
Based in Houston, Prosperity Bancshares (PB - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 7.12%. The financial holding company is paying out a dividend of $0.56 per share at the moment, with a dividend yield of 3.09% compared to the Banks - Southwest industry's yield of 0.73% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $2.24 is up 1.4% from last year. Over the last 5 years, Prosperity Bancshares has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.83%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Prosperity Bancshares's current payout ratio is 47%. This means it paid out 47% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, PB expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $5.05 per share, which represents a year-over-year growth rate of 1.61%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, PB is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).